Acore Capital raises $1B to provide rescue cash to hotels

Lender is looking to provide financing to borrowers who can no longer extend their debt

Acore Partner Warren de Haan. (Acore, Getty)
Acore Partner Warren de Haan. (Acore, Getty)

 

Acore Capital raised $1 billion to provide rescue capital to struggling hotels.

The lender said it will originate and acquire senior loans, mezzanine debt and preferred equity to North American hotel owners, according to Bloomberg News.

The company is seeking to provide the financing to hoteliers who can no longer extend their existing debt with their lenders. In many cases, it will provide mezzanine loans or preferred equity, which generally carry a higher interest rate than conventional loans.

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Acore has been active in hotel lending since its founding in 2015. To date, the company has originated more than $4 billion in hotel loans, according to Bloomberg.

Hotels, along with retail, have been among the hardest hit by the pandemic. Last year was the worst year on record for hotels, with occupancy plunging to 44 percent, according to data firm STR. In New York City, nearly 80 percent of hotels backing CMBS loans showed signs of distress in October, according to Trepp, which tracks mortgage backed securities.

In New York, some of these distressed hotels are hitting the auction block. In January, a portfolio of seven Midtown Manhattan hotels owned by a joint venture between Hersha Hospitality Trust and Chinese investment firm Cindat Capital Management, were scheduled for auction after the owner defaulted on an $85 million mezzanine loan.

[Bloomberg] — Keith Larsen